Deals

CTLA-4 bound for the clinic, Bristol-Myers hands CytomX $200M to kick off an expanded discovery pact

Sean McCarthy, CytomX CEO

Over the last three years, Bristol-Myers Squibb has been steering four preclinical discovery programs it partnered on with South San Francisco-based CytomX, moving the lead CTLA-4 antibody to a near-term IND filing with an eye on first-in-human trials.

And now Bristol-Myers is signing up for eight more projects — six in oncology and two more outside of cancer, as CytomX pushes ahead in the clinic with a PD-L1 checkpoint the CEO believes can blitz its way through a pack of rivals and into the spotlight.

Getting this deal done calls for a $200 million upfront, plus up to an extra $3.6 billion in milestones as well as royalties for any commercialized therapy, bringing Bristol-Myers’ investment into CytomX to $257 million in cash, with close to $5 billion in goal money on the table.

For a discovery deal, that’s a substantial wager. And investors reacted warmly to the news, driving up shares by 24% Monday morning.

“The work with Bristol-Myers is going very well,” says a pleased CytomX $CTMX CEO Sean McCarthy.

The deal comes at a critical time for Bristol-Myers, as it wrestles with setbacks for its PD-1 checkpoint drug Opdivo. And there are implications here for the future of Bristol-Myers’ all-important immuno-oncology franchise.

CytomX’s claim to fame rests on its Probody antibody platform. The company has designed an antibody that links on to diseased cells, leaving healthy tissue alone, with activation in the tumor microenvironment.

The biotech has its own PD-L1 checkpoint that just jumped into a Phase I/II study early this year. And its lead work with Bristol-Myers could provide a new and improved CTLA-4 that is supposed to avoid the kind of off-target toxicity that has limited Yervoy’s use. That could at some point play a role in future Opdivo/Yervoy combinations, like the one Bristol-Myers is currently steering in the clinic.

CytomX has struck some marquee deals with a group of high-profile companies, including AbbVie last year.

McCarthy tells me he’s particularly pumped by the idea that Bristol-Myers’ $200 million will come in as completely non-dilutive revenue. The big biotech is paying the freight on the new discovery work, taking no new equity in the deal and providing cash that can be invested directly in the company’s growing pipeline.

That in-house effort is led by a PD-L1 program that will look to emerge as a clear favorite not only to the ones already on the market, but as well as the wave of follow-ups in the clinic at Pfizer/Merck KGaA, AstraZeneca and more.

“We believe the PD-L1 can become the centerpiece of combination imnunotherapies moving forward,” McCarthy says.

That’s a bold statement, given the hundreds of combination therapies that are already in the clinic as well as a long lineup of checkpoints that are under development. But McCarthy says they have the preclinical data needed to underscore the potential. And he’s planning to kick off a pair of combination studies with Yervoy and Zelboraf to demonstrate in real terms what he’s talking about.

If he’s successful, there’s some obvious upside in this checkpoint frenzied world we live in.


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